Correlation Between Flux Power and Atkore International

Can any of the company-specific risk be diversified away by investing in both Flux Power and Atkore International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Flux Power and Atkore International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flux Power Holdings and Atkore International Group, you can compare the effects of market volatilities on Flux Power and Atkore International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Flux Power with a short position of Atkore International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Atkore International.

Diversification Opportunities for Flux Power and Atkore International

0.46

Correlation Coefficient

Flux Power  Atkore International

Very weak diversification

The 3 months correlation between Flux and Atkore is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and Atkore International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atkore International and Flux Power is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Flux Power Holdings are associated (or correlated) with Atkore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atkore International has no effect on the direction of Flux Power i.e., Flux Power and Atkore International go up and down completely randomly.

Pair Corralation between Flux Power and Atkore International

Given the investment horizon of 90 days Flux Power Holdings is expected to generate 1.99 times more return on investment than Atkore International. However, Flux Power is 1.99 times more volatile than Atkore International Group. It trades about 0.08 of its potential returns per unit of risk. Atkore International Group is currently generating about -0.11 per unit of risk. If you would invest  168.00  in Flux Power Holdings on December 28, 2024 and sell it today you would earn a total of  35.00  from holding Flux Power Holdings or generate 20.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Flux Power Holdings  vs.  Atkore International Group

Flux Power Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flux Power Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Flux Power showed solid returns over the last few months and may actually be approaching a breakup point.

Atkore International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atkore International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Flux Power and Atkore International

The main advantage of trading using opposite Flux Power and Atkore International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power position performs unexpectedly, Atkore International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Atkore International will offset losses from the drop in Atkore International's long position.

The idea behind Flux Power Holdings and Atkore International Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.